High Cost Claim Diversion Strategy Saves Plan Sponsors Big Bucks

Patient dumping or smart risk management? Are lasers relevant anymore? The HOT POTATO risk transfer method……………….

“Exchange Dumping is a risk transfer mechanism whereby plan sponsors may induce high-risk plan participants to opt out of employer-sponsored coverage in favor of insurance available on the individual market. If properly designed, such an employer dumping strategy can promote the interests of both employers and employees by shifting health care expenses on to the public at large.” – Amy Monahan and Daniel Schwarcz, Associate Professors of Law at University of Minnesota Law School

More plan sponsors are quietly adopting the Hot Potato method of risk transfer at the behest of insurance advisors attempting to retain clients from competitive encroachment. “If you can’t beat them, join them” drives more brokers to adopt the Hot Potato method of risk transfer – high risk patient dumping to the individual market.

We are seeing more organizations promoting the scheme including the Samaritan Fund program, American Risk and The Compassionate Care Plan. Plus we are seeing some plan sponsors managing the concept in-house with good effect.

Here is a sampling of organizations that promulgate the Hot Potato Method:

According to the Samaritan Fund Program everyone Wins. “With an infinite amount of plan design possibilities, it is impossible for employers to choose one or two plans that fit everyone’s needs.  Even the best insurance plans don’t cover every drug or every procedure.  These holes in coverage get exposed when participants are faced with disease and high cost situations. The Samaritan Fund Program engages your employees, finds them coverage customized to their situation, and applies them for financial subsidy from foundations and charities sympathetic to their situations.”  

American Risk℠ works with stop loss carriers, third party administrators, independent agents, brokers and consultants, American Risk℠ providing self-insured employers with the tools, expertise and on-going support needed to implement and maintain a successful risk transfer strategy producing significant savings. These strategies eliminate the need for lasers as well as insured carve-out policies such as transplant coverage. Services include designing the terms of the plan utilizing indirect risk classification strategies as well as defining parameters within which the Plan Document should be structured. Our Free Choice Voucher strategy is part of our employee communications package. We assist qualified plan participants in reviewing their options as well as assistance in identifying and procuring appropriate individual health insurance coverage should they decide to opt out of their employer sponsored program. We extend these same services through our Spousal Advantage Program℠.”

The Compassionate Care Plan™ facilitates the Hot Potato Method through a fee based concierge service matching individual health care needs with the proper individual health insurance policy available on the individual market.

For more information including Plan Document language email: RiskManager@RiskManagers.us